McMahon To Repay Creditors From 1970s Bankruptcy

More than 35 years after walking away from nearly $1 million in debts, Republican U.S. Senate candidate Linda McMahon Thursday night abruptly decided to repay her creditors — and defuse a growing campaign controversy.

McMahon, who is now a multimillionaire, has been under pressure from her Democratic opponent, Chris Murphy, to pay back the people and businesses she and her husband, Vince McMahon, owed money to when they filed for bankruptcy in 1976 and walked away from nearly $1 million in outstanding bills.

The bankruptcy, a central element in McMahon's folksy, rags-to-riches campaign narrative for months, suddenly threatened to become a liability, just as she was stepping up criticism of Murphy.

In a statement emailed to reporters at 9:30 p.m. on Thursday, McMahon called the bankruptcy "a very humbling and difficult experience for our young family. In the years after the bankruptcy, we worked hard to get our lives back on track. Over the past three-and-a-half decades, our family has been fortunate to turn things around and build a successful business.''

McMahon, who, together with her husband, built the WWE into a global wrestling and entertainment company, had long insisted that she had not retained records of the bankruptcy. The documents "simply do not exist,'' her campaign manager, Corry Bliss, said several months ago.

But recently, The Day of New London obtained a partial copy of the bankruptcy file at an office of the National Archives in Waltham, Mass. — revealing new details about a volatile story. On Tuesday, The Day published a list of more than two dozen creditors who were never paid by McMahon, who has invested more than $65 million of her family fortune into her two campaigns for Senate.

New London Day reporter J.C. Reindl "provided that list to my campaign this past Tuesday,'' McMahon said in the statement released to reporters Thursday night. "Later that same day, I met with my campaign manager to review the documents — it was the first time I had seen the list since the bankruptcy proceedings.

"Over the past two days, Vince and I have begun attempts to locate and reach out to all individuals on the creditor list. It is our intention to reimburse all private individual creditors that can be located. We feel it is the right thing to do to pay them in full, including an adjustment for inflation at four times the initial amount as show on the list of creditors.''

The Murphy campaign blasted McMahon on Thursday for waiting nearly four decades before deciding to repay bills that led her to successfully file for bankruptcy. In recent weeks, Murphy has come under blistering criticism from McMahon for his own financial problems, including late payment of his mortgage and other loans. Murphy has paid all his outstanding debts.

"The McMahons had the ability to pay these debts a long time ago. It's a shame that it took 36 years and mounting political pressure for Linda McMahon to finally pay some, but apparently not all, of her debts,'' Murphy spokesman Ben Marter said. "The timing of her newfound goodwill reeks of political expediency, but, unfortunately, McMahon is only raising more questions about her financial dealings. Voters deserve to know who she still owes, how she plans to pay them back, how much, and why she only now decided to make right on her debts. It's time for McMahon to come clean and play straight with the voters."

The bankruptcy documents list 26 creditors, who filed claims of $955,805 in 1976, a sum equal to almost $4 million in today's dollars. On Wednesday, Bliss said "over half" of the McMahon's creditors had been repaid, although he provided no documentation.

The bankruptcy was initiated in April 1976, three months after Connecticut Bank and Trust filed for foreclosure against the McMahons for defaulting on the mortgage of their home on West Hartford's Orchard Road. The couple eventually regained their financial footing.